Abg Shipyard EBITDA dropped on 159% in 2015 and Revenue dropped on 72.9%

26-05-2015 • About Abg Shipyard ($ABGSHIP) • By InTwits

Abg Shipyard reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

• Abg Shipyard is a company in decline: FY2015 revenue growth was -72.9%, 5 years revenue CAGR was -3.8%
• EBITDA Margin is quite volatile: -59.0% in FY2015, 27.1% in FY2014, 31.2% in FY2013, 28.0% in FY2012, 27.1% in FY2011
• Abg Shipyard has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.2%. At the same time it's a lot of higher than industry average of 3.7%.
• CAPEX is quite volatile: 166 in FY2015, 2,526 in FY2014, 1,894 in FY2013, 5,308 in FY2012, 3,631 in FY2011
• The company has unprofitable business model: ROIC is at -4.8%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Abg Shipyard ($ABGSHIP) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	21,359	25,246	20,912	16,618	4,503	-72.9%
EBITDA	5,779	7,062	6,528	4,499	-2,659	-159.1%
Net Income	1,940	1,858	1,000	-2,220	-9,009
Balance Sheet
Cash	464	3,644	260	1,837	456	-75.2%
Short Term Debt	16,144	22,815	32,735	24,489	25,970	6.0%
Long Term Debt	9,237	13,653	10,763	29,829	43,560	46.0%
Cash flow
Capex	3,631	5,308	1,894	2,526	166	-93.4%
Ratios
Revenue growth	291.3%	18.2%	-17.2%	-20.5%	-72.9%
EBITDA growth	18.9%	22.2%	-7.6%	-31.1%	-159.1%
EBITDA Margin	27.1%	28.0%	31.2%	27.1%	-59.0%	-86.1%
Net Income Margin	9.1%	7.4%	4.8%	-13.4%	-200.1%	-186.7%
CAPEX, % of revenue	17.0%	21.0%	9.1%	15.2%	3.7%	-11.5%
ROIC	11.8%	12.0%	8.8%	5.0%	-4.8%	-9.8%
ROE	16.2%	13.3%	6.4%	-14.6%	-88.8%	-74.1%
Net Debt/EBITDA	4.3x	4.6x	6.6x	11.7x		-11.7x

Revenue and profitability

The company's Revenue dropped on 72.9% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 86.1 pp from 27.1% to -59.0% in FY2015.

Net Income marign dropped on 187 pp from -13.4% to -200% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 3.7%. CAPEX/Revenue dropped on 17.3 pp from 21.0% in FY2012 to 3.7% in FY2015. It's average CAPEX/Revenue for the last three years was 9.3%.

Return on investment

The company operates at negative ROIC (-4.80%) and ROE (-88.79%). ROIC decreased on 9.8 pp from 5.0% to -4.8% in FY2015. ROE dropped on 74.1 pp from -14.6% to -88.8% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 0.0x and Debt / EBITDA is . Net Debt / EBITDA dropped on 11.7x from 11.7x to in FY2015. Debt jumped on 28.0% in FY2015 while cash dropped on 75.2% in FY2015.

Appendix 1: Peers in Commercial Vehicles

Below you can find Abg Shipyard benchmarking vs. other companies in Commercial Vehicles industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
V.S.T.Tillers Tractors ($VSTTILLERS)	-36.0%	24.2%	-9.2%	29.6%
Tata Motors ($TATAMOTORS)		35.7%	13.5%	23.3%	13.4%
Trf ($TRF)	-16.6%	19.2%	-16.0%	5.4%
Beml ($BEML)	-17.6%	2.7%	3.2%	3.7%
Ashok Leyland ($ASHOKLEY)		15.5%	-3.3%	-8.0%	33.6%
Median (6 companies)	-17.1%	17.3%	-6.3%	4.5%	23.5%
Abg Shipyard ($ABGSHIP)		18.2%	-17.2%	-20.5%	-72.9%

Top companies by EBITDA margin, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
V.S.T.Tillers Tractors ($VSTTILLERS)	17.0%	14.0%	15.1%	19.2%
Tata Motors ($TATAMOTORS)	12.9%	12.3%	12.2%	13.5%	14.4%
Ashok Leyland ($ASHOKLEY)	11.0%	9.7%	7.0%	4.1%	10.7%
Beml ($BEML)	4.1%	4.8%	-1.5%	4.0%
Trf ($TRF)	2.2%	6.3%	-1.5%	1.3%
Median (6 companies)	7.5%	8.0%	2.8%	4.1%	8.8%
Abg Shipyard ($ABGSHIP)	27.1%	28.0%	31.2%	27.1%	-59.0%

Top companies by CAPEX/Revenue, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Tata Motors ($TATAMOTORS)	6.8%	8.5%	10.2%	11.8%	12.4%
V.S.T.Tillers Tractors ($VSTTILLERS)	1.3%	2.4%	6.7%	5.9%
Ashok Leyland ($ASHOKLEY)	3.2%	5.4%	5.2%	3.6%	1.6%
Beml ($BEML)	6.4%	4.4%	4.8%	1.5%
Trf ($TRF)	2.9%	1.5%	1.1%	0.4%
Median (6 companies)	3.0%	3.4%	5.0%	2.5%	7.0%
Abg Shipyard ($ABGSHIP)	17.0%	21.0%	9.1%	15.2%	3.7%

Top companies by ROIC, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
V.S.T.Tillers Tractors ($VSTTILLERS)	45.9%	36.4%	29.3%	41.0%
Tata Motors ($TATAMOTORS)	19.3%	20.1%	16.6%	17.2%	17.8%
Cranex ($CRANEX)		5.5%	5.3%	5.2%
Beml ($BEML)	2.3%	2.6%	-2.9%	1.9%
Trf ($TRF)	3.3%	11.4%	-4.1%	0.5%
Median (12 companies)	12.4%	10.6%	5.8%	1.2%	12.7%
Abg Shipyard ($ABGSHIP)	11.8%	12.0%	8.8%	5.0%	-4.8%

Top companies by Net Debt / EBITDA

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Trf ($TRF)	11.2x	5.2x		36.0x
Ashok Leyland ($ASHOKLEY)	2.0x	2.5x	5.0x	17.8x	5.0x
Cranex ($CRANEX)	6.1x	10.0x	9.9x	9.0x
Beml ($BEML)	6.9x	5.8x		8.0x
Tata Motors ($TATAMOTORS)	1.8x	1.7x	1.7x	1.2x	1.2x
Median (7 companies)	2.1x	2.8x	1.6x	8.0x	1.2x
Abg Shipyard ($ABGSHIP)	4.3x	4.6x	6.6x	11.7x

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